What can you do to Protect Yourself While Shopping Online?

Gone are the days of thumbing through a catalog and circling items for your wish list during the holidays. Today’s consumers are hyper-connected and constantly seeking convenience when it comes to almost everything, but especially spending habits online. With many online retailers offering deals of the day, discounted or free shipping, and fast delivery, it’s easier than ever to shop online. In fact, studies show 76% of United States consumers shop online, and that number is projected to increase, there will be more than 300-million U.S online shoppers in 2023.

Today you can buy almost anything online and that’s why it’s more important than ever to protect yourself from fraud, especially during the holidays when it comes to breaches and cybersecurity attacks. Here are some tips to keep in mind when shopping online this holiday season to protect yourself from cybercriminals.

Shop reliable websites

When it comes to online offers the age-old saying if it’s too good to be true it usually is, still rings true today. While a great deal might be hard to pass up, fake companies and less-than-reputable websites take advantage of people by using fake photos of products at deep discounts to lure in consumers. Always use trusted URLs instead of clicking on links. Look for https:// (not http) in the address bar before using your credit card online.

Designate a separate card for online spending

If you’re worried about someone compromising your information you can open a separate account with a debit card specifically for online purchases. You can add funds to the account and use your card like a traditional card but the added benefit is if your account is compromised the cybercriminals won’t have access to your whole bank account, just what you have in the account which is typically less than a traditional checking or savings account.

Track spending online

When it comes to your finances it’s important to keep an eye on your spending activity so you are aware of anything out of the ordinary as soon as it shows up as a transaction and you can immediately call your bank. In addition, make sure you are regularly checking your credit report to ensure everything is in order.

Protect your passwords

As tempting as it is, try to avoid using the same password for every site. Try using the suggested passwords from sites, if they seem complicated there is a good reason, it’s for your protection. Make sure you write your passwords done and keep them somewhere safe, never on your computer or phone. A good rule of thumb is to make all your passwords long and strong. When able, try using multi-factor authentication.

Beware of seasonal scams

Unfortunately, cybercriminals use any means to scam during the holidays including fake tracking emails, e-cards, fake charities, donation scams, and more. If you are leery of a fake site always double-check to make sure it is a known and trusted URL instead of absently clicking on a link.

McHenry Savings Bank wants you to have a safe and happy holiday season. We are always here if you have a question about your cybersecurity. Visit McHenry Savings Bank to learn how you can protect yourself today, or speak with an expert today by calling 815-385-3000.

Sources:

https://www.nielsen.com/apac/en/insights/article/2018/six-factors-driving-consumers-quest-for-convenience/

https://fitsmallbusiness.com/online-shopping-statistics/

Ways to Save For College

When your children are little it’s almost impossible to think about them heading off for college but it’s never too early to think about a savings plan for your child’s college education. For the freshman class of 2037, the cost of an in-state, four-year public university will run about $185,000 (accounting for a 4% increase annually). So if you have a freshman in high school or a little one starting preschool, now is the time to start saving in a college fund.

Deciding the best route for your child's future starts with knowing the financial options available. McHenry Savings Bank has compiled some recommendations to create and fund your college savings plan.

529 College Plans

Illinois is one of more than 30 states which offer a 529 college savings plan, sometimes referred to as the Qualified Tuition Program (QTP). With a 529, post-tax money is invested in the plan. Once your child starts college, you or your child are able to withdraw the funds, plus investment gains, tax-free to use for tuition, books, and any other qualified education expenses. 

There are no income requirements to set up or contribute to a plan. The funds in an account only have a nominal effect on financial aid; a maximum of 5.64% of 529 counts toward the expected contribution. If you have $100,000 saved, your financial aid only takes a $5,640 hit. A 529 plan’s account beneficiary can also be transferred to another family member if the child receives a scholarship or doesn’t plan on using the money.

Fees and operating costs vary per state. Contribution limits also vary per state but are significantly higher compared to a Roth IRA. In Illinois, the tax benefit is $10,000 annually for single filers and $20,000 for joint filers. Additionally, these contributions often are considered gifts, and thus qualify for the gift tax exclusion ($15,000 in 2019).

Roth IRA

Similar to a 529 plan, post-tax money is contributed and can be withdrawn tax-free (plus any investment gains) once the owner turns 59-½. However, a Roth allows withdrawals (tax- and penalty-free) for qualifying educational expenses after five years. The benefit is that is if your child opts not to attend college, the funds can be used for retirement (or a down payment for a second home).

While a Roth IRA account won’t initially hurt your financial aid eligibility, withdrawing any funds will be applied to your income.

The Roth has greater income and contribution limits compared to the 529. The contribution limits are $6,000 annually ($7,000 if over age 50). Plus if you earn $129,000 single / $193,000 jointly, you are not eligible.

Prepaid College Tuition Plans

This plan is pretty self-explanatory: contribute to your child’s college tuition now while locking in 2019 prices. For example, if in-state tuition is currently $15,000, a $7,500 contribution will get you a semester’s worth of tuition.  If the tuition cost is $30,000 when your child starts college, your initial $7,500 contribution will be worth the same 50% - or $15,000. This protects you from inevitable tuition hikes, especially if your child is in the freshman class of 2037.

Similar to a 529 plan, any financial gains from investments are usually exempt from federal taxes. The CollegeIllinois! Program is currently on hold, pending discussions with policymakers to help strengthen the program.

Now that you have set up a college savings plan (and recovered from sticker shock), it’s time to maximize your savings potential. Here are five things you can do to help you save what you need:

• Set up your checking account to automatically transfer funds into your college saving plan account.

• Invite family members and close family friends to contribute. A majority of 529 plans have ways to accept gifts, plus a contribution makes for a great birthday or holiday gift. 

• Ask your employer if they match 529 plan contributions. (Note: only 1% of companies do, but it doesn’t hurt to ask). 

• Periodically keep an eye on the account’s progress, but don’t overthink it. A simple strategy is to save one-third of the cost of tuition. Determine the amount by multiplying your child’s age by $3,000 for an in-state public school. For example, if your child is 10 you would need to save $30,000.

Visit McHenry Savings Bank today to learn how you can save for your child’s college or to speak with an expert please call 815-385-3000.

In addition, McHenry Savings Bank, through its wholly-owned subsidiary, McHenry County Investment Services Inc. (MCIS)¹, provides options for our customers with investment and insurance needs, including college planning assistance. Our president, Richard Hedlund, is available to take appointments at any of the MSB locations to discuss your personal financial goals. Please call to make your appointment today at 815-331-6464.

¹Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer member FINRA/SIPC. Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and MCIS, Inc. are not affiliated. Non-deposit investment products are not FDIC insured, not bank guaranteed and may lose value.

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Sources

https://www.mchenrysavings.com/Services/cd_savings.html

https://www.daveramsey.com/blog/saving-for-college-is-easier-than-you-think

https://www.nerdwallet.com/blog/investing/how-to-save-for-kids-college-and-retirement/

What You Need to Know About Health Savings Account

If you’re fresh out of college or recently joined a new organization, you may have overheard someone mention the term HSA and you find yourself a little lost. An HSA isn’t a government organization or debilitating ailment—quite the opposite! HSA stands for “Health Savings Account”. This type of account helps you stay healthy and helps you afford unforeseen (and often expensive) medical costs that pop up when you least expect them. Let’s take a quick look at what exactly an HSA is and why you should consider it. 

What is an HSA?

When people come into McHenry Savings Bank (MSB) asking about health savings accounts, we like to simplify it by saying that an HSA is an interest bearing, tax-deferred account for the purpose of saving for and paying the deductibles associated with a High Deductible Health Plan (HDHP). 

Certain healthcare plans, whether through work or the Healthcare Marketplace, have much higher deductibles than traditional healthcare plans. That means you pay less in monthly costs, but you also pay more out of pocket before your insurance kicks in. With an HSA in place, you can put aside some money to help you pay for those higher deductibles with money free from federal taxes and penalties.

How Does an HSA Work?  

You and possibly your employer can pay into your HSA throughout the year, which is then used for those deductibles. The amount (or participation) of an employer typically varies from company to company. There a few things to keep in mind, though, if you’re interested in setting up an HSA. 

First, there is typically a maximum amount set that you and your employer can pay into your HSA for the year. Check with your provider to see if the HSA carries over from year to year. If you set up an HSA through McHenry Savings Bank, then it does carry over year after year and any remainder can go towards retirement.

The cost of healthcare, whether out of pocket or covered by your insurance, is something that factors into your overall financial plan. If you’re simply paying those costs from your checking account, then you are missing out on an opportunity to put aside that money into a tax- and penalty-free account, which could save you during tax season and retirement. To learn more about HSAs, call MSB today at (815) 385-3000 or stop in and speak with an expert to answer all of your questions.  

How Farm Lending Supports Local Farms and Businesses

While the term agribusiness often refers to the business of farming, the term isn’t often used in association with actual farms and farmers. Agribusiness typically means an agriculturally-related business that supplies the farm inputs, such as farm machinery and parts, seed, fertilizers, chemicals, feed, etc. 

Agribusiness and farm lending helps our local farmers run their farms more efficiently. It can be challenging to keep up with the ongoing costs connected with operating a farm. At McHenry Savings Bank, we recognize that farmers need agricultural loans to help them stay afloat and we try to do this with competitive pricing. We strive to be a value-added resource to help you grow and succeed

. 

Some ways we can assist you are as follows:

Purchase Farm Land. Whether you are a new and beginning farmer trying to purchase some land, or an experienced farmer trying to expand your current farm operation McHenry Savings Bank can provide agricultural real estate loans to meet your needs.

Operating and Marketing Expenses. Farmers not only need financing for land, but they also need help covering basic operating costs, like rents, seed, fertilizer, and chemicals. Many times suppliers will offer discounts if these are paid upon ordering which saves the farmer money and we can provide a loan to help cover this cost. It also pays to market all year long and at times there is an expense to this that we can also help you cover.

Equipment loan. Equipment has become much bigger and can do lots of work in a short amount of time, which is the good news. The unfortunate part is the cost of that equipment has grown too and we can be there to craft a loan to help you keep up with the new technology or to replace those essential worn out pieces.

Agribusiness – We do also supply financing for what is referred to as Agribusiness. If you are looking to start a business supplying agricultural products or if you wish to expand your current business, we would like to help.

At McHenry Savings Bank, we tailor financial solutions to your farming operation. We realize that no two farm operations are alike. Even neighboring farms growing similar crops will use different techniques from seeding to harvesting. We take a unique approach serving each of our agribusiness customers. Come on in and tell us your current situation and ultimate goals. We will customize a solution that meets your specific needs. We offer term loans, lines of credit, and real estate loans, designing them to do what you precisely need through Farmer Mac.

At McHenry Savings Bank, we are local people making local decisions. We have been serving the Banking needs of the people of McHenry County, Illinois, for over 60-years. With locations in McHenry, Richmond, and Johnsburg, we are a full-service financial institution with personal, commercial, agriculture and investment services. We also service areas outside of McHenry County so feel free to contact us. Please contact Tim Kempel, Senior SVP, Director of Agribusiness at 815-331-6406 for more information.

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Sources: 

https://university.upstartfarmers.com/first-time-farmer-loan

https://www.thebalancesmb.com/what-is-agribusiness-2538209

https://www.business.com/articles/agricultural-loans/

Avoiding Identify Theft

In the past 7 years, over 107 billion dollars has been stolen from Americans through identity theft. In 2016 alone, 16 billion dollars were reported stolen as a result of identity theft. In a cyber world, as technology gets smarter so do the criminals that infiltrate it. Armed with sneaky computer viruses, credit card skimmers, and scammy pop-ups, phone calls, and emails there is suspicion lurking around every corner. Here are 6 ways to help avoid becoming part of this 107 billion dollar statistic by preventing an identity theft.

1. Protect Personal Information.  Never share your social security number online or over the phone. It is important to not share your pin number with anyone, even those you trust.
2. Shred It.  If you receive mail or statements with personal information, shred them before recycling them to ensure your information stays safe.
3. Utilize Online Banking.  Most banks have some sort of mobile application which allows you to check balances, make deposits, or transfer funds on the go. They also allow email or text message alerts that can notify the account holder if they incur a transaction more than X amount of dollars or if an account drops below a certain pre-designated amount.
4. Monitor Credit Reports.  Everyone can receive a free copy of their credit report from one of three credit reporting agencies. Space these out correctly, and you can receive a report once every four months to make sure there are no surprises.
5. Protect Devices.  Never access the internet without first acquiring virus protection software. Check the URL of a website before entering any information. Look for an “S” after “Http” to be sure that the site is secure. Cell phones should always have a passcode in case they are ever lost. If you choose to sell or trade your phone, make sure to completely wipe all of the information stored within the phone’s internal memory.
6. Report It.  Report suspicious activity to your bank immediately.

McHenry Savings Bank is a full-service financial institution with personal, commercial, and investment services. To learn more about how to protect your identify and bank account, visit our website, or call us at (815) 385-3000.

Financial Spring Cleaning

Spring has sprung! As the sun returns and the temperatures rise you see them…salt stains in the mud room, an intimidating colony of dust bunnies in the hallway, and something nearly unidentifiable just under the fridge. You put on your rubber gloves, blast some music, and grab your arsenal of cleaning products. It’s time to spring clean. Certain things need to be tidied up each spring but might not be so obvious. There’s no dust, dog hair, or debris gathered on your finances; but that doesn’t mean they couldn’t use a good clean-up. Here are 5 ways that the American Bankers Association (ABA)  encourages consumers to get organized with their finances.

Evaluate Your Debt
Reevaluate your payment plan and increase payment size if possible to reduce the amount of interest paid over time.

Review/ Update Your Budget
Did you get a new job this year? Did you have a child? These are all life changes that impact your family budget. Develop a spending/saving strategy and stick to it. Come next spring, you’ll be happy you did.

Check Your Credit Report
You are eligible for one free credit report from each of the 3 credit bureaus. Screen these reports for any mistakes that could jeopardize your credit score or ability to receive a loan.

Download Your Bank’s Mobile App
Most banks have some form of mobile application. By having your finances in the palm of your hand, you can quickly and easily transfer funds, deposit a check, or check your balance. You may also opt to go paperless by receiving an e-Statement each month as opposed to a paper copy. This will keep you informed while keeping more paper clutter from entering your home.

Pay Your Bills Automatically
There’s no sense in jeopardizing your credit score over a forgotten bill payment. Set up autopay for recurring expenses like car payments, insurance payments, and bills. The money will be automatically deducted from your checking or savings account on the same day each month.

Need help cleaning up your finances? McHenry Savings Bank is a full-service financial institution with personal, commercial, and investment services. Visit our website, or call us at (815) 385-3000 for more information. Our Personal Bankers are available to help you meet your financial goals!

Everything You Need to Know About IRA and 401K Rollovers

Planning for retirement? Then you’ve probably heard of or started a 401k. One of the biggest ways to save for retirement is to invest part of your income into a retirement plan like a 401k. Employers will offer a 401k match to encourage you to contribute to that plan. What happens when you leave that company? You may need to do a 401k rollover. Below is a quick guide to a few options when it comes to planning for your retirement.

What is a 401k?

It’s a retirement savings plan which most people start contributing to through an employer. It allows employees to save and invest a portion of their paycheck before taxes are taken out and often times the company will match a certain percentage.

What is the difference between a 401k and IRA?

The quick-and-easy difference between retirement funds is that a 401K plan will be managed by a company’s administrator, choosing the mutual funds and other investments that are available to you and setting the rules about withdrawals. An IRA puts you in charge, giving you more options for investments to choose from.

What is a 401k-to-IRA rollover?

This is when you move money from a 401k to an IRA. No taxes need to be paid when you do a direct rollover to a Traditional IRA. Simply put, your money and assets just move from one type of account to another and keep all the tax benefits the same.

Should you rollover?

Here are three things to consider when deciding if you should do a rollover:

1. The fees

2. The quality of investments in your 401k compared to an IRA

3. The rules of the 401k plans when switching to a new job

If you let your money in your old 401k sit in the old account, it could cost you tens of thousands of retirement dollars if the new plan at the new job is better. But if you have a high quality 401k plan currently, you may want to leave your money to continue building.

If you are young, you should consider setting up a rollover strategy. If you change jobs a few times, consolidating your savings by rolling them into a single IRA plan will make it easier to manage your retirement money. If you need help setting up an IRA plan, McHenry Savings Bank is here to help you.

When it comes to all your financial needs, visit McHenry Savings Bank and learn how you can save or speak with an expert today by calling 815-385-3000.

7 Worthwhile Ways to Use Your Tax Refund

According to the Internal Revenue Service, more than 70 percent of the nation’s taxpayers received a tax refund averaging nearly $3,000 in 2017 and received a similar amount in 2018. As Americans receive their refunds along with additional benefits coming from the Tax Cuts and Jobs Act passed in December of 2017, McHenry Savings Bank has highlighted seven tips to help people use their money wisely.

“Tax season is the perfect time to hit the reset button on your finances,” said Jim Zak, Vice President of Retail and Small Business. “Your refund can help put you on the right path towards reaching your financial goals. Consider using it to pay off debts or creating an emergency fund.”

To help consumers make the most out of their money, McHenry Savings Bank has highlighted the following tips:

• Save for emergencies. More than 60 percent of Americans are not prepared for unexpected expenses. You can prepare by opening or adding to a savings account that serves as an “emergency fund.” Ideally, it should hold about three-to-six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car.

• Pay off debt. Pay down existing balances either by chipping away at loans with the highest interest rates or eliminating smaller debt first.

• Save for retirement, your child’s education or future health expenses. Open or increase contributions to a tax-deferred savings plan like a 401(k) or an IRA. MSB can help set up an IRA, while a 401(k) is employer-sponsored. Look into opening a tax-advantaged 529 education savings plan to ensure school expenses will be covered when your child reaches college age. Or save for future health expenses with tax-free dollars by investing in a Health Savings Account. MSB has Money Market accounts, Certificates of Deposits and Health Savings Accounts to fit your needs.

• Pay down your mortgage or student loans. Make an extra payment on your mortgage or student loans each year to save money on interest while reducing the term of your loans. Be sure to inform your lender that your extra payments should be applied to principal, not interest.

• Invest safely with U.S. savings bonds or municipal bonds. The U.S. Treasury allows for savings bond to be purchased using your tax refund for as little as $50. Savings bonds earn interest for a maximum of 30 years.

• Invest in your current home. Use your refund to invest in home improvements that will pay you back in the long run by increasing the value of your home. This can include small, cost-effective upgrades like energy-efficient appliances that will pay off in both the short and long term – and with tax credits (as long as Congress continues to renew the program).

• Donate to charity. The benefit is two-fold: Giving to charity will make a difference in your community, and you can also claim the tax deduction, if you itemize.

McHenry Savings Bank also stresses the importance of lower-income workers filing a tax return—even if their income is too low to trigger any federal tax liability—in order to potentially claim the Earned Income Tax Credit (EITC). Depending on a recipient’s income, marital status and number of children, the EITC can result in a refund of up to $6,318 to help taxpayers achieve their financial goals. Contact McHenry Savings Bank today at 815-385-3000 to learn more about offered products and services that you can use, like Personal Finance Manager, to help meet your financial goals.

McHenry Savings Bank is a community bank located in McHenry County with locations in McHenry, Richmond, and Johnsburg. Please visit the website at www.mchenrysavings.com or like and follow on Facebook, Linked In or Twitter.

Markets: A Ticker Tape of Emotions

Remember when learning the latest stock prices meant sitting down and reading a newspaper? Newspapers, printed daily, gave out blocks of information every 24-hours. To learn the most recent stock price, one had to wait for the next newspaper to come out. Few people want to return to reading newspapers to receive their financial information. The majority of us prefer to read prices online, yet newspapers sure beat the anxiety that often accompanies the minute-by-minute volatile stock market fluctuations. Then how do you deal with those fluctuations that often send us into a financial tizzy? Don’t panic with a stock market correction. According to the Motley Fool, a stock market correction is determined as a drop of at least 10% from a recent high price.

Corrections happen a lot

When financial planners build portfolios they base it on science vs. behavioral biases. Planners expect that 25% of calendar quarters will have a negative return. They offset this by controlling the size of the negative returns, selecting a strategic mix of investments that neither have a potential for high returns, nor a risk of low returns. This is commonly known as Diversification.

Corrections usually don’t last

With research conducted on the Dow between 1945 and 2017, John Prestbo at MarketWatch determined the typical correction (averaged to be 13.3%) only lasted 71.6 trading days. To us everyday people, that means 14 calendar weeks.

Resist the urge to sell off and ride the financial wave.

First, most of us do not have the discipline to stay with a winning investment guidebook. But we also tend to make the transaction at the very wrong time, leading to larger losses.

Keep an eye on long-term investments.

If you are a short-term trader, corrections matter. However, most of us are thinking about retirement as a long term goal. That said, keep your eyes on more conservative courses like your 401K (which we hope you are optimizing with employer match contributions). Along with your 401K, consider our retirement plans, look into ROTH, Traditional, Education, & SEP IRA's. Certificates of deposit also hold promise, with maturities ranging from six months to five years.

We don’t have a crystal ball.

It is obvious that we can’t predict the future, but some of us need to be reminded of this fact. Corrections happen at any time, without warning and are caused by a variety of issues. One example is the knowledge that the Great Recession landed when the housing bubble popped and this caused the subprime mortgage crisis. How many fortune tellers in 2006 predicting this?

Don’t think that you are alone when it comes to preparing for your future. Visit McHenry County Investment Services located in MSB's McHenry Office or click here: https://www.mchenrysavings.com/Services/mcis.html to learn about investments, tools and resources offered to help you save up for a better tomorrow. Please call to make your appointment today! (815) 331-6464.

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Sources:

https://budgeting.thenest.com/read-stock-prices-newspaper-29096.html

https://www.thebalance.com/how-to-handle-stock-market-corrections-2388309

https://www.fool.com/knowledge-center/6-things-you-should-know-about-a-stock-market-corr.aspx

Tips to a Healthier Savings Account

If you made a New Year’s resolution to grow your savings account, you are not alone. However, it can be difficult to go from happy holiday spending to learning to actually save and grow your money. The good news is that by taking a few simple steps, you can grow your savings while creating better habits when it comes to your financial health.

Set a Personal Budget 
Creating a personal budget will help you to map out your finances and work out where your money is going. It’s important to live within your means and not spend more than you earn. Start by tracking your monthly spending and see how it compares to your earnings by using McHenry Savings Bank (“MSB”) eBanking Personal Finance Manager. Then, set a budget to help you stay in the black. If you need additional help, try using this MSB’s Budget Percent Calculator.

Stay Focused on SMART Money Goals
People tend to be more enthusiastic about their new savings goals and spending plans early in the year, but a very small percentage of resolution makers actually keep it up. Writing down money goals - and even representing them visually - can keep the motivation going. For instance, if you want to save money for travel, keep pictures of your prospective dream vacation at hand and pull them out whenever you’re tempted to buy something you don’t really need.

SMART goals must be Specific, Measurable, Attainable, Realistic, and Time-sensitive. For example, rather than setting an ambiguous goal, like "save more money," make it SMART by aiming to save an extra $3,000 for emergencies by the end of the year. Work out how much you need to save each paycheck to reach your goal with MSB’s Savings Goal Calculator.

Be Patient
Make the most out of 2019 and better your financial life. Just remember that saving money takes time, and you might not see the effects rights away. Don’t get discouraged! Putting in an effort to develop solid habits will help you follow through with your savings goals - even after the excitement of the New Year has worn off.

MSB can provide you with the right product to help you meet your short-term and long-term financial needs. Now is a great time to save for Christmas 2019 with our Christmas Club Savings Account. This account earns interest, you can deposit as much as you like, and at the end of October you will be sent a check with the money you have saved plus interest earned…. Just in time for holiday shopping.

If you are looking to earn more interest on your money, Certificates of Deposit and Money Market Accounts are also a great addition to your financial portfolio. Visit McHenry Savings Bank to for more information on our savings products so or call 815-385-3000 to speak with personal banker today.  Make sure to LIKE us on Facebook and stay up-to-date on current events, blogs, and specials. 



Sources:
https://www.mchenrysavings.com/index.html
https://www.thebalance.com/how-to-budget-and-save-money-in-5-easy-steps-4056838
https://blog.mint.com/saving/the-minimalist-guide-to-budgeting-in-your-20s-072016/
https://bettermoneyhabits.bankofamerica.com/en/saving-budgeting/ways-to-save-money